- Transatlantic Trade And Investment Partnership: How Should Turkey Cope With The Changing Dynamics?
- February 12, 2015 | Author: Safak Herdem
- Law Firm: HERDEM Attorneys At Law - Istanbul Office
The free trade agreement, known with its acronym TTIP, currently being negotiated between the United States and the European Union is expected to have immense legal implications as well as commercial ones for the signatories. The numbers are self explanatory; two blocks when combined together produces almost half the world's GDP and around one third of the total world trade. The bilateral trade across the Atlantic has already exceeded USD 3.7 trillion. For these two economic giants to sign such a deal mean a monumental shift in world economic balances. As the United States and the European Union are expected to benefit significantly from such shift, the countries that will be left out will have to face a new legal regime that would cover the entire jurisdiction producing half of the world's GDP.
The Thorny Legal Issues
Due to the discreet and intergovernmental nature of the negotiations it is difficult to know in advance what exactly will be included in to TTIP. As the Americans made it clear, the American Administration ardently opposes the inclusion of the financial services in to the agreement. Given the rift in mentality between the United States and the European Union where the Americans are strongly inclined toward de-regulation in financial markets and the European are for regulation, such a statement by the American side is most natural. The European side has its concerns as well; as it made clear that audiovisual services should be left out due to the concerns that if the current EU regulations on audiovisual services that are tasked with the safeguarding of the cultural diversity of the EU replaced with a one negotiated with the United States through the TTIP talks might turn the EU cultural climate in to a barren desert of cultural uniformity.
However the thorny issues are not limited with the financial and audiovisual services. Especially important are the issues related with the genetically modified food, pharmaceuticals, the safety standards imposed on the motor vehicle producers, chemicals and the environmental standards concerning the carbon emissions with regard to the aviation industry. In all these different business sectors both the United States and the European Union have diverging regulations mainly distinguished from one another by a diverging mentality of low levels regulation v.s high levels of regulations. Moreover the EU has the additional problem with regard to the practices adopted by the Court of Justice of the European Union which tends to grant priority for the Community law over the legal implications of an international treaty like the TTIP. Hence there still are outstanding issues between the United States and the European Union to be resolved before an agreement can be signed.
The Implications for Turkey
The free trade agreement between the U.S and the EU, if signed, will have implications for the third parties. Turkey as an emerging economy with strong economic ties to Europe will fell the air of change in global economic relations. As the bilateral trade with the European Union consists 60% of the annual Turkish foreign trade, changes in TTIP shall be keenly followed in Turkey. As the regulatory standards will be re-negotiated and re-settled between these two powers from motor vehicles design and safety standards to carbon emissions, from pharmaceutical products to genetically modified food, the best way for Turkey is to press for its own inclusion to the TTIP if possible given its own Customs Union with the European Union. However the prospects for such an inclusion does not seem very bright given the signals from both sides of the Atlantic that this will be an exclusive agreement covering only the U.S and E.U. Hence for Turkey the attainable goal might be to restructure its own industry along the lines adopted through TTIP, once the regulatory changes go public. A quick harmonization of the Turkish legal and commercial standards with the new legal and commercial standards adopted by the TTIP will give the Turkish business a headway for conducting a stable course of bilateral trade with at least the European part of the signatories as it is assumed that the Customs Union with Turkey will continue to remain in effect.